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Just how big is $11 Billion? GILD Acquires VRUS

November 21, 2011
Seeing the markets open down 2% or more on a Monday morning feels like "business as usual" on Wall Street these days. What is not, is seeing the Nasdaq Biotech Index (NBI) shoot up 4.5% on the same day the markets are cratering. It is very rare these days to find any sector not correlating with the volatile downturns set off by debt laden countries around the globe.

So what is behind the inverse correlation today? Look no further than Pharmasset (VRUS), a company that comprised 7% of the Biotech Index last Friday and now accounts for almost twice that. News that Gilead (GILD) will buy the company for $11 Billion shot the stock up 85% this morning.

Just how big is $11 Billion? $11 Billion puts this acquisition in the top 5 of the last 5 years. And that holds when we look at pure biotech buyouts or traditional and specialty pharmaceutical acquisitions.  The first table below shows the top 10 biotech acquisitions since the start of 2007. The second table shows the Pharmasset deal with the traditional and specialty pharma acquisitions.

Table 1. Top 10 biotech acquisitions since the start of 2007

Table 2. Top 10 traditional and specialty pharma acquisitions since the start of 2007

The $11 Billion is even more impressive when you realize that all the other names above are of companies that sold FDA approved drugs. Pharmasset is still at the clinical trial stage.

Pharmasset's primary focus is the development of oral therapeutics for the treatment of hepatitis C virus (HCV) infection. They currently have three clinical-stage product candidates advancing in trials in various populations. PSI-7977, an unpartnered uracil nucleotide analog, is currently being studied in an interferon-free, Phase 3 program (FISSION, POSITRON and NEUTRINO) and in five Phase 2b trials including subjects with all HCV genotypes. PSI-938, an unpartnered guanosine nucleotide analog, is in QUANTUM, a Phase 2b interferon-free trial of PSI-938 and PSI-7977 in subjects with all HCV genotypes. Mericitabine (RG7128) continues in three Phase 2b trials and one interferon-free trial being conducted through a strategic collaboration with Roche. (For more info visit